Location: Concho County, TX | Metro: San Angelo, TX MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,080 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,930 |
| 4 Bedrooms | $2,180 |
| 5 Bedrooms | $2,529 |
| 6 Bedrooms | $2,832 |
| 7 Bedrooms | $3,059 |
| 8 Bedrooms | $3,212 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 76940 is based on the annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $1150 for fiscal year 2024. This figure serves as a benchmark for rental income under the Section 8 program.
Given that the median home value in ZIP 76940 is not available, we cannot directly calculate a cap rate for homeownership investments. However, we can still derive an implied gross yield for the Section 8 scenario. To do this, we must consider the potential purchase price of a property in this area. Assuming a property could be purchased for $200,000, the annualized rental income would be $13,800 ($1150 per month).
The implied gross yield for a Section 8 property in ZIP 76940 would thus be 6.9%. This is calculated by dividing the annual rental income by the property's purchase price: $13,800 / $200,000 = 0.069 or 6.9%. This yield is based purely on the rental income and does not account for expenses such as maintenance, property taxes, insurance, or management fees.
Market rent data is also not available for ZIP 76940, making it impossible to compare the gross yield against typical market yields. Without this information, investors should be cautious about projecting returns based solely on the Section 8 rental rates.
A noteworthy factor in this analysis is the reported 0.0% renter density. This suggests that the majority of residents in ZIP 76940 are homeowners, which might indicate a lower demand for rental properties, including those participating in the Section 8 program. Additionally, the Days on Market (DOM) data being unavailable implies that there is insufficient recent transactional activity to gauge the speed at which rental units are typically leased.
In conclusion, while the Section 8 program offers a guaranteed gross yield of 6.9% based on the provided FMR, the lack of market rent data and the low renter density in ZIP 76940 make it challenging to assess the overall attractiveness of this investment opportunity. Landlords and small-portfolio investors should conduct further research into local market conditions and consider consulting with local real estate professionals before making any investment decisions.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.